Do you know the difference between a low doc home loan and a non-conforming loan? To be honest, it’s easy to get confused when it comes to loan terms. Even if you’ve had several loans in the past, it can still be confusing to understand it all. However, non-conforming and low documentation loans are two of the most important loans you’ll see today. So, what are these loans and how can they help you?
What You Need to Know about Low Doc Loans
A low documentation loan is a specially-crafted loan that uses a self-verification process and requires fewer documents to support your loan application. A low doc home loan typically allows for alternative income paperwork. For instance, if you don’t have regular payslips, your most recent tax return could be used or business activity statements. Low documentation home loans are ideal for those who are self-employed or run a business also.
What are Non-Conforming Loans?
Similar to a low documentation loan, a non-conforming loan was crafted for borrowers that don’t meet the criteria for standard loans. You can look for a non-conforming loan if you have a poor credit history, a low credit score or are self-employed. If you’ve started a new business recently or are close to retirement, these loans might be ideal. Why don’t you check out www.lowdocloansco.com.au to find out more about low doc loans?
How do These Loans Differ?
A non-conforming and low doc home loan were both designed for borrowers that couldn’t qualify for traditional loans. However, a non-conforming loan is perfect if your credit score is poor or don’t have an irregular income pattern. Low documentation loans are best for self-employed individuals and small business owners.
Why are Alternative Loans Necessary?
You have a good job but since you’re a contractor or small business owner, you don’t have the standard financial paperwork. You don’t get monthly payslips and your financial documents don’t meet the criteria set by lenders. It can create a borrowing nightmare as it means you won’t qualify for most bank loans. Fortunately, non-conforming and low doc loans offer alternative routes. You get to apply for viable loans with alternative paperwork to prove your income.
It means you have the chance to qualify for personal, business and home loans. To find out more, check out www.lowdocloansco.com.au.
How to Choose Between Non-Conforming and Low Documentation Loans?
It comes down to what you need. For example, you have poor credit and won’t qualify for a traditional home loan. So, a non-conforming loan might be your best option. On the other hand, your credit is in good shape but you just don’t have the necessary paperwork to back your application. In this instance, a low doc home loan might be more appropriate.
Get the Best Loan for You
With so many loans available, it’s easy to get confused over which is best for you. In truth, you need a loan that works for your exact circumstances and offers a competitive interest rate. Non-conforming and low documentation loans are both credible loans that are worth taking a look at. A non-conforming loan is best for those with poor credit and low doc loans are ideal for those who’re self-employed.